Virginia

In September 2012, I said that Republican governors should be expanding their Medicaid programs under Obamacare.

I argued that Republicans have long called for state block grants and the flexibility to run their own Medicaid programs in what are the state “laboratories of democracy.”

I made the point that, given the then recent Supreme Court decision enabling states to opt out of the expansion, the Obama administration would be hard pressed to deny any reasonable proposal from Republican governors.

If Republicans really believed in state responsibility and flexibility for how they run their Medicaid programs, this was the opportunity to prove it. (See here.)

Since then, a few Republican governors have taken that tack and the Obama administration has been very cooperative and flexible.

This is a good place to recognize outgoing HHS Secretary Sebelius for her leadership by being willing to work with state Republicans in order to get millions of people covered who wouldn’t be getting coverage otherwise.

Good faith Republican Medicaid proposals have led to good faith responses from Sebelius’ Department of Health and Human Services (HHS) and a few done deals and other deals still in the works.

Many Republicans have said that Medicaid is not sustainable and that the feds could well cut the new Obamacare funding in future years. Sebelius responded by giving these governors an out if funding were to be cut.

Of course Medicaid is unsustainable, that’s why the states should be given the autonomy to run their own plans and deal with these challenges in any number of different ways the country can learn from.

While my politics are well known to THCB readers, I rarely encourage people to do anything about it–especially in a state where I don’t get to vote, but today is different. Aneesh Chopra is running for Lt Gov in Virgina. He’s the former CTO of the US and a really good guy–who is running based on improving science and technology in a vital state, where the Republicans are literally into trans-vaginal ultrasounds & creationism. To my SF and LA-based friends, you can meet Aneesh at Cigar Bar & Grill on Mon 18th 5.30-7 in downtown SF and in in 1240 Shadow Hill Way, Beverly Hills on Tuesday 19th 7-9pm. This is a chance for the tech community to support one of its own, so I encourage you to go along and write a check. For more information or to RSVP please contact Caitlin Blair at Caitlin@chopraforva.com or (703) 468-1456, or I’m sure if you show up Aneesh will be happy to see you!–Matthew Holt

The two states on Tuesday were the latest to announce their intentions on the Affordable Care Act’s health insurance exchanges. States have until Feb. 15 to tell HHS whether they’ll retain even some control over the exchanges, or let the Obama administration run the exchanges for them.

And while New Hampshire made clear that it wants to partner with the federal government to launch an insurance exchange, North Carolina backed out of a previous plan to do exactly that.

By Friday, we’ll know where half a dozen other states stand, too.

Background on Partnership Model
The Affordable Care Act didn’t originally spell out the partnership model; under the law, states faced a binary choice of running their own insurance exchanges or punting the responsibility to the government.

But HHS officials realized they needed to tweak the ACA’s approach, as more than 30 states — increasingly led by Republicans, who took over 11 statehouses in the 2010 election — announced they planned to opt out of the exchanges altogether. This would leave HHS officials with “an awesome task in establishing and operating exchanges in [so many] different states and coordinating those operations with state Medicaid programs and insurance departments,” before open enrollment begins in October 2013, Paul Starr writes in The American Prospect.

Under the hybrid approach, the federal government takes on setting up the exchange’s website and other back-end responsibilities, while states keep functions such as approving health plans and setting up consumer assistance programs. HHS also hopes that the partnership model will be a path for states that weren’t ready to run their own exchanges to take them over eventually.

Article 1, Section 8, Clause 3 of the Constitution, better known as the Commerce Clause, states that Congress has the power to “regulate Commerce…among the several States.” To supporters of health reform, the Commerce Clause is the Grinch that stole Obamacare. To opponents, the Commerce Clause might seem like a Sanity Clause (apologies to the Marx Brothers.) One thing now seems certain. Obamacare is on the fast track to the Supreme Court, where a ruling on the Commerce Clause could have far reaching implications for health reform and, frankly, for many other federal interventions into economic activity.

Virginia officials cited the Commerce Clause in arguing that the individual mandate was beyond the power of Congress. U.S. District Judge Henry Hudson agreed with the centrality of the Commerce Clause:

While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate and tax a citizen’s decision to participate in interstate commerce.

Judge Hudson does not reject health reform in its entirety. Although he speculates as to whether the bill would have been enacted without the exchange, he notes that the record in the case is insufficient for a final determination and thus he “severs (the individual mandate) with circumspection,” leaving the rest of the bill intact. In doing so he provides a road map to others attempting to strike down the entire legislation, provided they can find some evidence that votes hinged on the inclusion of the exchange.

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